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Richard,

25% BMV is not a big enough discount to be doing BTS, not in this market.

If your friend is cash rich just pop off to the auctions in Bristol and pick something up that is at least 30% BMV.

Suggest you buy before the auction to cut out the competition. Subscribe to the online auction databases and do all the usual DD.

If you struggle to find a deal let me know and I will take you up on the offer of you paying twice our normal fee :-)

Paul thanks for the advice. I agree 25% is pretty marginal. I note you are in Doncaster. Stuff is still selling down here in Bristol and props are quite a bit more expensive so that makes the costs of acquisition and disposal proportionately less. But I agree we could really do with a bit more discount!

Achieving 30%+ was possible here at auction earlier this year but now the domestic buyers are back in droves and auction properties often go at well above market value when you factor in costs of acquisition, finance, renovation, and disposal! Domestic buyers don’t have to make a profit so can always outbid us. Also they can be pretty lax at doing DD (due diligence, research, for the benefit of anyone new reading), and can get carried away emotionally at the sale. The auctioneers know this, and advise the sellers to set reserve prices accordingly.

The 2 x normal commission was a special deal I had reserved for David Beard. I believe he sells deals for £1K. Twice that or even more would be just fine for a really cracking deal, it’s just that some of his deals are, how can I put it politely, not exactly ‘cracking’. I didn’t have much faith in him to come up with the goods and so far he hasn’t.   

Meantimes I have been approached privately by a couple of investors with what look like promising deals. They are both a bit out of area, but not so far as to make it unmanageable to go and have a look. Note – these are investors with deals that don’t quite fit with their own strategies but might work for us. Not finders. This is about what I had anticipated to be honest. For the sake of discretion I won’t publish any more details at the moment, but later on and with their permission I might reveal more, if and when we have anything concrete. I am still open to other offers, by the way!

As an aside, I know a young investor called Ahmwaah. His biggest piece of advice to new investors is to have fun! What great advice, I’d just like to second that. I’m having a great time doing this, it’s a lot more fun than I would tramping the streets pushing leaflets thru doors. What a joyless task! And, even better, it might just do some good, if it scares off the Blight of Pig - the liars, chancers, and swindlers who have been spamming the site recently.

Rich

Richard,

Just checked the database of unsold auction lots in your area. It indicates at least one property at 25% BMV according to Hometrack. I would recommend picking them up pre auction though if possible. Target the properties that require a bit of work because that always puts off the general public.

My experience is that there are very few properties that have problems with title (even properties sold at auction).

Hi Paul,

Thanks for taking a look. Just been having a look thru myself and bug****** if I can see it. We are not talking about guide prices are we because we all know they are a hopeless fantasy to draw in the domestic punters – at least in my area. Would you be so kind as to PM me the link?

Regarding problem titles, you may well be right. However, my investor’s experience has been that dodgy finders are very proficient at sniffing them out then trying to sell them on as deals to novice investors! He had a look at a large semi near where we live, it was unmortgageable because another party had certain rights assigned in the title. It seems pointless I know as the investor will find out as soon as a conveyencer gets a look at the title. But by that time, the finder has already pocketed a fee in many cases!

Rich

Richard,

I will speak to the auctioneer on Monday to assess how motivated the seller is.

A couple of months ago we sourced a property pre auction, spent £5K on a refurb and it was recently valued at 94% more than purchase price plus refurb costs i.e. just under 50% BMV (incl refurb costs). Do you think we had to advertise the deal on Singing Pig?

Hah hah ha no I don’t suppose you did!!!

Cheers,

Rich